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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This is an Employment Agreement dated as of September 22, 1997, between
Xxxxxxxxx Enterprises, Inc., a Kentucky corporation with offices in Ashland,
Kentucky ("Employer") and Xxxxxx X. Xxxxx of Littleton, Colorado ("Employee").
RECITALS
A. Whereas, Employer desires to hire Employee to serve in the
capacity of President and Chief Executive Officer of Xxxxxxxxx
Enterprises, Inc., and
B. Whereas, Employee desires to accept such employment on the terms herein
set forth.
NOW, THEREFORE, in consideration of the foregoing and of the covenants
herein contained, the parties hereto agree as follows:
1. Employment. Employer hereby agrees to employ Employee, and Employee
hereby accepts such employment by Employer, upon the terms and conditions set
forth in this Agreement.
2. Term. The term of this agreement (the "Term") shall be the
three-year period commencing September 22, 1997, and ending on September 21,
2000, unless terminated sooner pursuant to paragraph 10 below. The Term may be
extended by agreement of the parties.
3. Duties. During the Term, Employee shall hold the position of
President and CEO of Employer and such other affiliates requested by Employer.
Employee shall perform the duties customary for that position, and such other
duties as Employer may from time to time assign to him. Employee agrees to use
his best efforts for Employer's benefit, and throughout the Term shall devote
his entire time, attention, and energies to Employer's business. Employee shall
not, without Employer's prior consent engage in other business activities
requiring significant time of the Employee, provided however that Employee shall
be permitted to continue his ownership and participation (which shall require
more of Employee's time during the next three months to fulfill existing
commitments) in International Executive Services, LLC, and Beaver Brook Coal,
LLC, as long as such involvement does not conflict with Employees duties
hereunder. Employee may invest his assets in such form or manner as will not
require any services on his part in the operation of the affairs of the
enterprises in which the investments are made.
4. Compensation. During the Term, Employee's compensation for duties
performed under this Agreement shall consist of the following:
(a) An annual Base Salary of $400,000, to be paid bi-weekly
with annual merit increases as set by the Employer.
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(b) Bonus compensation as Employer may, from time to time
decide.
(c) Employee shall be entitled to participate in any employee
benefit plan sponsored by Employer for the benefit of its employees, upon the
same terms and conditions as other employees of the Employer.
(d) Notwithstanding any provision herein to the contrary, if
during the Term of this Agreement there shall be a Change of Control as defined
herein, Employee shall have the right to receive seven and one-half percent
(7.5%) of the then issued and outstanding stock of Xxxxxxxxx Enterprises, Inc.
Such right shall not include the right to share in sale of the Mining
Technologies Division assets (referred to as "the MTI Assets"). Currently
Employer is negotiating the sale of the MTI Assets, but if for any reason same
is not consummated at the time Employee is to receive stock pursuant to this
paragraph the parties shall negotiate a reasonable reduction in the number and
percentage of stock to be transferred to Employee to reflect the value of the
MTI Assets. Employee has been given a copy of a draft Asset Purchase Agreement
between Xxxxxxxxx Enterprises, Inc., Mining Technologies, Inc. and Mining
Technologies, Limited, that describes in detail the MTI Assets.
(e) Other benefits.
(1) During the Term, Employer shall at no expense to
Employee provide Employee with a house (owned or leased by the Employer) in the
Ashland, Kentucky area, that is mutually agreeable.
(2) During the Term, Employer shall at no expense to
Employee provide Employee with an automobile for use in connection with
Employee's performance of his duties hereunder, so long as Employer may recover
the cost of that automobile over a three-year period in accordance with Section
168 of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
(3) Upon execution of this Agreement, Employer shall
provide Employee an interest free $150,000 "bridge loan" to be fully paid by
Employee upon (i) the sale of Employee's Residence (defined below); or (ii) one
(1) year from the date hereof, whichever shall occur first.
(4) Employer shall reimburse Employee for reasonable
moving expenses from Colorado to Ashland, Kentucky and shall reimburse Employee
for his realtor's fee incurred in the sale of Employee's house located at 0000
Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxx (the "Employee's Residence") (not to
exceed six percent (6%) of the sales price) so he can relocate to Ashland,
Kentucky.
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(5) Employer shall furnish or pay the cost of a term
life insurance policy in the amount of $500,000, during the Term or any
extension thereof.
5. Reimbursal of Expenses. Employer shall reimburse Employee for all
reasonable travel, entertainment, and similar expenses that Employee incurs in
promoting Employer's business subject to policies and directives from the
Employer.
6. Vacations. Employee shall be entitled to four weeks of vacation time
per year, during which time Employee's salary shall be paid in full. Unused
vacation for any year during the term may be accumulated for use in subsequent
years. Upon termination of Employee's employment hereunder, Employee shall
entitled to compensation for all unused vacation time earned during the term of
this Agreement or any extension thereof.
7. Facilities. Employer shall provide Employee with an office, books,
stenographic and technical help, and such other facilities, equipment, supplies
and services as are suitable to his position and adequate for the performance of
his duties.
8. Disclosure of Information. Employee acknowledges and agrees that
Employer's operations, financial reports, customer information, strategic plan,
salary and employee information, and other confidential information pertaining
to Employer's operations and business affairs, as the same may exist from
time-to-time, are valuable, special, and unique assets of Employer's business,
and Employee shall not (without Employer's prior written consent), either during
the Term or thereafter, for any reason or purpose whatsoever, disclose any such
information to any person, firm, corporation, association, or other entity.
Employer may protect this interest by seeking and obtaining a court injunction.
9. Disability. If during the Term Employee becomes unable to perform
his duties hereunder because of disability that is not due to an injury incurred
by Employee in the line of duty while performing company business hereunder,
Employee shall be entitled to his full monthly salary during the six months next
following the onset of such disability. If that disability continues throughout
that six month period, Employer may terminate the Employee's employment
hereunder. Upon such termination, the Term shall be deemed to have ended and all
obligations of Employer and of Employee under this Agreement shall cease, except
as provided in Section 10(a)(ii) of this Agreement. Solely as used in this
paragraph "disability" shall mean Employee's inability (as determined by a
physician mutually selected by the parties) due to accident or physical or
mental illness, to adequately and fully perform the duties that Employee was
performing for Employer when the disability began. If at any time during the
Term the physician mutually agreed upon by Employer and Employee makes a
determination with respect to Employee's disability, that determination shall be
final, conclusive, and binding upon Employer, Employee, and their successors in
interest.
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10. Termination.
(a) Events of Termination. Notwithstanding any other provision
of this Agreement to the contrary, and except for any notice required pursuant
to paragraph 10(b), this Agreement and Employee's employment under the terms of
this Agreement will terminate immediately and without notice upon the first of
the following events to occur:
(i) Employee's death;
(ii) A "disability" of Employee, as defined in
Paragraph 9 of this Agreement lasting more than six months, provided that such
disability is not due to an injury incurred by Employee in the line of duty
while performing company business hereunder;
(iii) Termination for "cause" (as defined below) by
Employer; or
(iv) September 22, 2000 (the end of the Term), unless
extended by written agreement of the parties.
(b) Notice of Termination. Any termination by Employer or by
Employee, pursuant to Sections 10(a)(ii) or 10(a)(iii) to this Agreement, shall
be communicated by written notice of such termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice,
from Employer or from Employee, which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Employee's employment under the provision so indicated.
(c) Compensation Upon Termination. In the event of termination
of this Agreement due to an event of termination pursuant to paragraph 10a
above, Employee shall be entitled to be paid for services rendered up to the
time of actual termination, and reimbursed for costs incurred pursuant to
Paragraph 5. Should Employee be terminated for any other reason, Employee shall
continue to be paid the remaining compensation over the Term, even though he is
no longer working for Employer.
(d) Definitions. For purposes of this Agreement, the following
words and terms shall have the following meanings:
(i) Cause. Termination by Employer of Employee's
employment for "cause" shall be limited to mean termination upon (A) the willful
and continued failure by Employee substantially to perform his duties with
Employer after written demand for substantial performance has been delivered to
Employee by Employer; or (B) the willful engaging by Employee in gross
misconduct materially and demonstrably injurious to Employer; (C) breach of
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fiduciary duty involving personal profit; or (D) commission of any federal or
state criminal offense. For purposes of this definition, no act, or failure to
act, on Employee's part shall be considered "willful" unless done, or admitted
to be done, by Employee not in good faith and without reasonably belief that
Employee's action or omission was in the best interest of Employer.
(ii) Change of Control. A "change of control" shall
have occurred if (A) any "person"(as such term is used in Sections 13(d) and
14(d) (2) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of Employer representing 50% or more of the combined
voting power of Employer's then outstanding securities; (B) during any period of
two consecutive years, individuals who at the beginning of such period
constitute Employer's Board cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by
Employer's shareholders, of each new director was approved by a vote of at least
2/3 of the directors then still in office who were directors at the beginning of
the period; (C) substantially all the assets of Employer are sold, other than to
an affiliate; or (D) if Employer or AEI Holding Company, Inc issues equity
securities pursuant to an initial public offering.
11. Employee Representation. Employee represents that his past actions
in the coal industry will not cause Employer to be permit blocked, due to the
employment hereunder.
12. Assignment. The services to be rendered by Employee under this
Agreement are unique and personal, and Employee may not assign any of his rights
or delegate any of his duties under this Agreement. Except as provided in the
immediately preceding sen tence, this Agreement shall benefit Employee and his
heirs and per xxxxx representatives.
13. Severability and No Violation. If any provision of this Agreement
or its application shall be invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of all other applications of that
provision and of all other provisions and applications hereof shall not in any
way be affected or impaired. The laws of the Commonwealth of Kentucky shall
govern the validity, construction, and interpretation of this Agreement.
Employee represents that in signing this Agreement he will not violate any other
agreement to which he is a party.
14. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Kentucky.
15. Non-Waiver. A delay or failure by either party to exercise a right
under this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.
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16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
17. Entire Contract. This Agreement constitutes the entire
understanding and agreement between Employer and Employee with regard to all
matters herein. There are no other agreements, conditions or representations,
oral or written, expressed or implied with regard thereto. This Agreement may be
amended only in writing, signed by both parties.
18. Headings. The headings in this Agreement have been inserted solely
for convenience of reference and shall not be considered in the interpretation
or construction of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Employment Agreement as of the date set forth in the preamble hereto, but
actually on the date set forth below.
Employer:
Xxxxxxxxx Enterprises, Inc.
By:___________________________
Employee:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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